A new land dispute in Jerusalem that could force hundreds of Arabs from their homes is stirring up Palestinian anger.

Palestinians went on strike in protest over Israel's plans to demolish 88 Arab homes in disputed East Jerusalem. Schools and shops are closed in East Jerusalem and throughout the West Bank. 

The strike was called after Israeli municipal officials and security forces visited several homes in the Palestinian neighborhood of Silwan near Jerusalem's Old City. That raised fears that the demolition of the houses is imminent.

One of the Palestinian strikers, East Jerusalem shopkeeper Mounzar Karadi, said Israel is not interested in peace.

"The peace process is not existing any more after more houses demolished, more land taken, more settlements have been built in the West Bank," he said. "People became desperate, hopeless, and the situation is very bad."

Palestinian youths watch a bulldozer destroy a house in the Silwan neighborhood of east Jerusalem, 05 Nov 2008

Jerusalem Municipality officials say the homes slated for demolition were built illegally and they are simply imposing the law. But Palestinians say they cannot get building permits and that Israel is trying to drive Arab residents out of Jerusalem.

The city, which is holy to both Jews and Muslims, is one of the thorniest issues of the Israeli-Palestinian conflict. Israel sees Jerusalem as its eternal capital while Palestinians see it as the capital of their future state.

The outgoing Israeli government was prepared to relinquish parts of Jerusalem under a peace deal with the Palestinians, but former prime minister Benjamin Netanyahu is not. Mr. Netanyahu and his Likud party have been tasked with forming the next Israeli government, putting him in line to recapture the prime minister's job if he can form a coalition. He has vowed that Jerusalem will never be divided again.